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Title: The internal and external governance of cooperatives: the effective membership and consistency of value
Author(s): Sacchetti, Silvia
Tortia, Ermanno
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Citation: Sacchetti S & Tortia E (2012) The internal and external governance of cooperatives: the effective membership and consistency of value . AICCON, WP 111/2012. AICCON, Faculty of Economics, University of Bologna.
Keywords: cooperative firms
production networks
JEL Code(s): L21
Issue Date: Jul-2012
Publisher: AICCON, Faculty of Economics, University of Bologna
Series/Report no.: AICCON, WP 111/2012
Abstract: Cooperatives are characterised by mutual-benefit coordination mechanisms aimed at the fulfilment of members' participation rights and welfare, consistently with the normative principles of democratic involvement, independence and care for the community. This ideal situation may find, in practice, obstacles within the internal characteristics of the cooperative as well as in the nature of relationship with other actors in the socio-economic environment. Building on evidence from the literature, the paper systematises and highlights some of the potential problems in the governance of cooperative firms concerning the accomplishment of cooperative mutualistic aims by way of means that do not hamper other stakeholders in the socio-economic environment. In exploring the internal conditions that may affect cooperative performance, we focus in particular on the role of rules and incentives towards such aims. In synergy, when analysing the external conditions that may affect cooperative performance, the paper addresses possible sources of external control, such as those related to the nature of the business relationships between the cooperative and its production network. In taking into account both internal and external conditions, we consider an extended notion of governance, whereby those who impact on strategic decision-making are not to be searched only within the internal governance bodies, typically the board of directors or managers, but also outside the cooperative, as in the extended network of production relationships in which the organisation is embedded.
Type: Working or Discussion Paper
Rights: Publisher allows this work to be made available in this repository. Published by Faculty of Economics, University of Bologna.
Affiliation: Socio-Management
University of Trento

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